Davis BrownHealth Care Reform Blog

Supreme Court Upholds Affordable Care Act - June 28, 2012

As previously reported the United States Supreme Court upheld the Patient Protection and Affordable Care Act ("ACA") by a 5-4 vote with Justice Roberts joining Justices Ginsburg, Breyer, Sotomayor and Kagan in upholding the individual mandate. The majority upheld the individual mandate on the basis of the federal government's ability to tax its citizens. According to the majority, the shared responsibility payment required of individuals who do not have health insurance is constitutional as a tax as it is not so high that there is no real choice but to purchase insurance, the payment is not limited to willful violations, and the payment is collected solely by the IRS through normal means of taxation.

The Court also addressed the constitutionality of the ACA's Medicaid expansion provisions which expanded Medicaid coverage to additional populations. With respect to these provisions, the majority found that States cannot be threatened with a loss of their existing Medicaid funds if they decline to comply with the expansion. Although this portion of the ACA is unconstitutional, the majority found the constitutional violation to be fully remedied by precluding HHS from withdrawing existing Medicaid funds for a State's failure to comply with the requirements set forth in the expansion provisions. According to the decision, no other provisions of the ACA are affected.

In summary, the ACA is preserved in its entirety with the limited exception that HHS cannot withhold existing Medicaid funds to States who fail to comply with the ACA's Medicaid expansion provisions. A copy of the Supreme Court's opinion